Recent changes to Federal regulations, specifically the Office of Management and Budget Circular A-21, will now allow the University to eliminate the difference in the capitalization level on equipment purchased on Federal versus Nonfederal funds. The difference has existed since July 1, 1990 when the State increased its level to $1,000 while Federal regulations retained the level at $500. This difference in definition has created many problems in coding requisitions and inventorying equipment.

Effective July 1, 1996 the University’s definition of capital equipment, for all funds, will be changed to include only those items that cost $1,000 or more, and have a useful life of two years or more. Effective immediately, this definition of capital equipment should be used when preparing budgets on applications for extramural support.

We hope that this single definition of capital equipment will create less problems in the future. If you have questions concerning the application of this policy to Federal programs, contact Robert Andresen at 608-262-2896.